Diesel-water fuel emulsion means diesel fuel at least 14% of
which is water and for which the emulsion additive is registered by a United
States manufacturer with the EPA under section 211 of the Clean Air Act as in
effect on March 31, 2003.

A reduced tax rate of $.198 per gallon is imposed on a diesel-water
fuel emulsion. To be eligible for the reduced rate, the person who sells,
removes, or uses the diesel-water fuel emulsion must be registered by the IRS.
If the diesel-water fuel emulsion does not meet the requirements above, or if
the person who sells, removes, or uses the fuel is not registered, the
diesel-water fuel emulsion is taxed at $.244 per gallon.